ISLAMABAD, Aug 4: The World Bank has indicated that it would enhance Pakistan’s annual assistance from $600 million to $900 million to specially help four major sectors including governance reforms.

Official sources said here on Monday that the new vice-president of the World Bank for South Asia, Praful C. Patel, is arriving here on Aug 7 to hold wide-ranging discussions with the Pakistani authorities with a view to provide additional $300m annual assistance.

Mr Patel is scheduled to hold talks with Finance Minister Shaukat Aziz, economic adviser to the ministry Dr Ashfaque Hasan Khan and other senior officials of the economic ministries on Aug 8.

Sources said that Mr Patel, who has replaced Ms Meiko Nishimizu, would discuss new World Bank funding for four major sectors which included governance reforms, infrastructure projects, poverty alleviation and human resource development.

“Pakistan would prefer World Bank’s additional assistance because it is expected to be offered on International Development Agency (IDA) terms having 0.75 per cent interest rate”, said a concerned official.

Sources said since Pakistan has formally decided not to seek any new funding from the IMF, Islamabad would now go for increased assistance from the WB and the ADB on reduced mark-up rate.

However, sources said any significant increase in annual funding will depend on the pace and development of structural reforms and so long as Pakistan remained creditworthy for Bank’s lending.

It was also said that the new $900m annual assistance is expected to be a blend of International Bank for Reconstruction and Development (IBRD) and the International Development Agency (IDA) funding. But Pakistan is mostly seeking IDA funding which is significantly more concessional compared to IBRD. The Bank did not propose any IBRD lending for 2002-03.

Pakistan has also been assured of World Bank’s support to strengthen the investment climate through a combination of analytical work and financial assistance targeted to reform in key sectors.

The World Bank plans to carry out a significant programme of analytical work to build the knowledge base to underpin the policy dialogue on private sector development.

Pakistan has also been told that the World Bank will continue to support the reforms of the governance and regulatory environment for power, gas, oil, financial sector, pricing and tariff reforms, and privatization, as well as support to provincial and district governments reforms to improve the quality of basic infrastructure and social services.

Officials said that the International Finance Commission will support the development of new products to better meet the needs of the private sector including long-term finance for infrastructure and expand access to financial services to new clients like the bankable poor through micro-finance or leasing institutions and to the under served small and medium enterprises sector.